In general, a coupon is a voucher or a certificate entitling the holder to a particular discount offer described or referenced by the coupon. Coupons have been around for over 150 years. Discount coupons have been used by businesses to market their products and services. Traditionally, coupons were printed and distributed to users. With digital revolution, coupon has changed its form and has become digital. Whether digital or printed, coupons can be taken to redemption center such as retail store, website or phone ordering system. These redemption centers provide discount to the user based on coupon terms and applicability. While the traditional method has been effective, there are many pitfalls to the entire process.
Coupon providers distribute coupons using delivery mechanisms like mail, newspaper inserts, door-to-door delivery or other publications. The user has to cut the coupons, sort them based on interest or need and then clip it and take it to a redemption center such as retail store, website or phone ordering system for purchase. This process is inconvenient to the user. During a purchase, the user has to take out the product (or store) specific coupons and use the coupons for making the purchase to avail the discount. The redemption center has to collect all redeemed coupons and send it to a coupon clearing house for reimbursement. Coupon clearing is full of hassles and is very expensive.
Print coupons are inconvenient for users, redemption centers and issuers. The user has to find coupons manually and carry them. Getting too many unwanted coupons turns out to be a bad user experience. The user may end up trashing all the coupons they receive (wanted and unwanted). The redemption center has to manually keep track of all coupons accepted and process for reimbursement. Besides providing credit in the form of a discount to the user, the redemption center has to take the extra effort to get it reimbursed. For the coupon issuer there is an additional overhead of processing reimbursements. Reimbursements process is typically outsourced to coupon clearing houses, which make process costly for the issuer. The issuer does not know the end customer and does not have any other effective mechanism to re-engage the user. Most importantly, the issuer does not know if the user liked the coupon and whether the user will make the purchase. There is no way to predict how many coupons to print and how many will get redeemed. Also, paper based coupons are not ecologically friendly and they are also not effective in stopping fraudulent usage.
In the past, efforts have been made to create loyalty programs that work across multiple merchants and allow merchants to create and issue coupons to the users of the loyalty program. While this approach has helped user receive coupon offers from multiple businesses, this approach does not allow users to interact and negotiate the offer with businesses. Also, loyalty programs have to share user data with the merchants which may create privacy issues for the users.
Digital coupons have gained popularity with the arrival of the Internet and mobile technology. At present, technology offers paperless coupon solutions. Moreover, there are various advancements made in context of digital coupon technology to protect misuse of digital coupons. Existing methods aim to provide communication systems for digital coupons, providing solutions for issuing, distributing and redeeming coupons. Digital coupons provide better organization and more ecological solution. With mobile internet access, users can now have access to coupons anywhere they go. Despite their advantages, digital coupons in the current form are only digital translation of existing paper based coupon functionality. The approaches taken in past does not provide solutions to existing problems like engaging customers and business interactively, providing effective solution to drive repeat business and restricting fraudulent usage without compromising on privacy of the user.
In the light of the above discussion, there appears to be a need for a more efficient, easy method and system for generating discount coupons.